Barfoot & Thompson had its best month ever in March, with sales volumes and selling prices both setting new records.
Auckland's biggest real estate agency sold 1844 residential properties in March, the highest number of sales it has ever made in a single month.
March sales were up 64% compared to February, and up 68% compared to March last year. However, sales in March 2020 were affected by the country going into Level 4 lockdown towards the end of the month.
Prices also broke all previous records, with the average selling price hitting $1,107,869 in March, an increase of $32,461 (+3.0%) compared to February, and up by $114,341 (+11.5%) compared to March last year.
Barfoot's average selling price has been above $1 million since October last year.
The agency's median selling price increased to $1,048,000 in March, an increase of $38,000 (+3.8%) compared to February, and up $123,000 (+13.3%) compared to March last year (see the chart below for the monthly price trends).
New listings were also at their highest level for the month of March in 15 years, with the agency signing up 2138 new listings in March compared to 1941 in February and 1763 in March last year
However, the agency's total stock of homes available for sale dropped to 3394 in March from 3416 in February, and was at its lowest level for the month of March since 2016.
That suggests the supply of homes for sale in Auckland remains tight.
"In terms of both prices paid and the number of homes sold, this March was the strongest trading month in the company's history," Barfoot & Thompson Managing Director Peter Thompson said.
"Contributing to the extraordinary sales numbers during the month were 2138 new listings - the highest number of new listings in the month of March for 15 years and about a quarter higher than we would normally list at this time of year."
"Based on sales numbers, the reintroduction of LVR [restrictions] appears to have had limited impact," he said.
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Barfoot sales in March clearly huge increase on March 2020 (about 69%)
But they should be careful comparing to March 2015. Sales in NSC for example were 335 in March 2015 and 276 in March 2021.
Prices rising 2-3% in a month is outrageous
Great news for the real estate agents - have they repaid the millions in wage subsidies they received yet?
Do you in fact understand the criteria by which these payments were decided upon?
They were based on what % loss of income the person had compared to a period pre lockdown.
Earnings in period subsequent to lockdown hence irrelevant.
I understand the criteria for the wage subsidy. In light of the activity this industry experienced in the past year, it is farcical that it would need to be subsidised by the taxpayer. Indeed, many companies preemptively claimed the wage subsidy and have since returned it because the conditions as they unfolded did not warrant it.
if you do the maths, as I have, you would know that average Agent in Auckland sells about 3-4 properties pa.
And about 25% of Agents get 65% of sales.
If your remarks reflected that divide, I would be more amenable to them
You are correct. But some businesses didn’t take the subsidy even if they met the criteria. I guess they had enough cash for a rainy day. In an ethical world, in which we obviously no longer operate, businesses that could survive without the subsidy would pay it back, which would allow those funds to be used to provide increased support for those who really need it. Given the gigantic bounce back the real estate industry has had, I think there should be some questions asked about whether the larger players, like Barfoot, opt to do the ethical thing and return the subsidy. Many retailers and professional services firms already have.
Are you really putting the words 'ethical' and 'the Real Estate Industry' in the same sentence?!
Sadly, as you suggest, 'the Real Estate Industry' could just as easily be replaced with Politicians or Bankers (I was one, but don't like openly admitting it now in civilised company).
That's not how wage subsidies work, back during lockdown you were eligible for the subsidies if you had a fall in income of 40% compared to the previous year or more recently a fall of 30% compared to the previous weeks. The subsidy is not to be repaid against future income
I wonder if it can be written off then? still plenty will ponder though, how this going to be repaid... or? may be don't have to at all, a great distortion tools clearly have been found here.
It’s interesting the amount of pressure put on other industries and businesses, many of whom were under pressure but have since repaid it, has not been placed in the same way on the real estate industry. The word parasite is often used on this website, unfairly IMO, but this industry is out of control. You know you have a problem when people can do 2 x 30 min open homes over 3 weekends and make more than surgeons.
Between the Realesate industry and the bankers they are the perpetrator of the biggest Ponzi scheme NZ have ever seen.
If I was the red team I would depower both of them and put the market in the hands of professional registered valuer and only allow banks to lead up to register valuation.
This is how it works with commercial building and how it used to work with residential.
Neither the banks or the realestate industry can be trusted.
"only allow banks to lead (=lend I assume) up to register valuation."
You don't know what you're talking about, the banks lend less than that, they lend up to 80% of the purchase price or registered valuation, whichever is LOWER, or in some rare cases up to 90% max which is still less than what you're suggesting.
If you had any property experience in residential property you would understand that there has become a huge gap between registered valuations and sales price.
Banks totally out of control on how they do business.
Unbelievable! The party still continues and records still tumble, will the end of interest tax deduction and 10 year CGT make much difference in coming months…?
No - it will make very little difference
In order for the party to quieten down you have to take the punchbowl away. Am paraphrasing, and the originating phrase is very well known.
When it comes to central banking, the punchbowl = interest rates.
I repeat, the only way to dampen irrational exuberance is to take the punchbowl away. Everything else is just tinkering at the margins.
Really does highlight the absurdity of all the shrieking and whinging from the likes of Ashley Church and his disciple investors re being asked to contribute a mere portion of the tax they should be.
It'll dent a little bit but we all know what's the real cause of this madness...cheap credit aka interest rates. House prices and interest rates move inversely in lock step. We need interest rates to go up and up and up.
Cash is being invested too, not much incentive to leave it in a bank savings account.
Its old stats preceding any Govt announcement. Lets see what the next one says.
“ will the end of interest tax deduction and 10 year CGT make much difference in coming months…?”
Probably not, people are willing to pay to keep their properties, now the cost will go up significantly but most will still pay to keep.
Take out the number driven investors, it is now emotional FHB vs Desperate FHB. On top of this, the government will go all out to “support” FHB, and they are not doing this by building more houses.....interesting times.
What will make difference will not be implimented or delayed for the reason that will cool down the ponzi and that is Interest only loan.
So will hear lot of noise on everything except IO loan.
Welcome to NZ
South Auckland sales doubled compared to March 2020.
So when is the downturn now Mike? 3,6 or 9 months from now?
Lots of Kiwibuild and other affordable housing going in out there, including with ballots etc.
Total value of sales
March 2021 1,844 properties $2,042,911,493
So $2b in sales in one month?
If the market did want to liquidate wouldn’t that be a bottle neck. Over one trillion in capital goods but a sales system that can only process $2b a month?
Images of a flock of sheep trying to get through a gate on a farm.....
Sheep baaahh. Well its 2billion in Barfoots sales, which is not quite the whole, but as you suggest the market could turn if the team of 5million ( or at least 3million ) decided to sell together. . My view of where the New Zealand housing market will be headed will be seen in the stock on market versus the flow on/off. At present stock is trending downwards.
I’m only here for Mike Kirk
meaning?
Oh look perhaps I’m being unfair. You are one of the few on here who attempts to look at the numbers with any analysis. My comment was basically a glib remark because I knew you would have already responded and I knew I was looking to read your take. Sorry for being a bit of a d@ck. Have a nice Wednesday.
Thanks. No offence taken
We live in interesting times.
Could be a last hurrah; Government announcements were not made until 23rd although some announcement was expected.
Personally looking to results over the next month or two to see what market is doing.
Yes so will I, the calculations are quite clear now (even without policy detail) so it will be very interesting to see what investors do. Do they hold at a small loss and bet on continued capital gains, taking the risk of more policy changes and interest rate rises, or do they sell?
Recent comments in the news were that most returns are from capital gains (a tacit admission of buying intent) and that there's every expectation this will continue. I'd see that expectation of future capital gains being very, very slow to change if at all. So I'd expect people will pay their taxes and receive a little less free money in the short term with the expectation of continued capital gains / devaluation of fiat money.
I'm not expecting much sell-off unless they touch Interest Only speculators.
But we're a massive welfare state now (along with other countries) under QE monetary policy and subsidies for rental yields etc, so while investors have received the most benefit of this brave new monetary welfare state perhaps we'll simply bring more and more into the welfare fold...
"Barfoot & Thompson's sales volumes and selling prices both set all time records in March"
AND we thought that February with 10% jump in a month was the best month but .......
Still Queen Jacinda and her knights Robertson and Orr waiting and thinking if to control the speculative demand by stopping Interest Only Loan.
Can someone ask them what are they waiting for ?
Now for sometime the queens and her knights will bask in the glory of transtasman bubble, hoping that housing crisis takes a back seat but will it ?
If you haven’t signed this already - go for gold https://www.change.org/p/grant-robertson-restrict-interest-only-loans-w…
Every signature helps.
Petition or no petition - one is dealing with thick skin politicians and bureaucrats, who only listen and may be waiting for big actions from Average Kiwi and FHB. Though has not happened until now but so did coronavirus - anything possible in future and responsibility for any excessive will be on Jacinda and Orr.
Not really a surprise - lets see how April onwards tracks.
Those thinking that Barfoot sales show that the mania continues should wait until REINZ figures come out next week. Undoubtedly sales are shooting ahead of where they were in same months of 2020 and 2019. Question is: is the increase steady, rising or falling? REINZ sales figures in Jan and Feb, whilst excellent, were not as rampant as in Oct-Dec period, in terms of % rise. This shows that mania is dissipating. Listings rate per day in auckland shows same.
Some interesting info on Barfoot site
Central suburbs average sale price FELL compared to last March ($1.377m - 1.203m)
Rodney average SP rose 27% ($908k - 1.155m)
NSC average SP rose only 7.8%
Central city shoeboxes.
Thanks for that summary.
It's the 'more affordable', remote places that are booming because central areas are so horrendously expensive.
Perhaps covid is a factor too, with wFH becoming more embraced.
Yes. Avg prices being pushed along by cash rich buyers looking for more space.
Everything at play here is distorted.
Can we trust average prices? Perhaps the mix of sales favoured lower priced places?
Stacks of 4-5 bedroom new builds being sold in Rodney. Perhaps that's a big part of that movement.
Looking forward to the next round of measures to quench this dumpster fire.
Sounds like you're oozing from every orifices.
FHBs who managed to acquire their own homes are now free from landlords lording over them.
Your inability to celebrate other people's successes is astounding- the epitome of the real problem in this country.
If this is your stand up act, don't quit your day job just yet.
There's nothing stopping Kiwis celebrating average home ownership while dealing with investor freeloading.
Yay!! Great to see the productive economy doing well. (sarc).
"Based on sales numbers, the reintroduction of LVRs appears to have had limited impact," he said.
Important to have tried and failed (for now) than not trying and the same applies to INTEREST ONLY LOAN - should atleast try and try as soon as.
Though other measures introduced are welcomed but not good if speculative demand fuelled by interest only loan is not stopped and Jacinda and Mr Orr by not acting on best option in current situation only indicates that in reality are not serious about controlling the rising housing pyramid (after 20 to 30% till January, followed by 10% rise in a month and now 2% to 3% rise per month ......).
Person who does not know swimming may not drown in 5 feet water but than every inch is fatal.
Any future fall, which will at some time, despite all manipulation and delay should be with Jacinda and Orr and should not be allowed to get away with "We said to be carefull' as they are helping in creating FOMO BY not controlling.
Bring on the ban on interest only loans and the introduction of DTIs
Popularly, Barfoot regarded as selling 35% of property in Auckland
Which, with 1844 sales in March would suggest that REINZ will show 5268.
As REINZ showed 2583 last year in March, that seems highly improbable.
REINZ will probably be more like 3700.
In which case, we may need to revise what % of Auckland sales Barfoots gets?
Interesting comemntary when you consider Yesterdays Auction results were pretty poor with over 50% passed in execept for the central auction rooms where 8 of the 14 properties sold. In one of the auctions 13 of the 18 lots were passed in with several only reaching their 2017 RV numbers.
Be a bit careful looking in isolation. Yesterday was a bit of a dumping ground. Decent stock isn't being auctioned off the day after Easter holidays.
todays auction results are not much better - in fact the leafy suburbs Auction of Remuera, Greenlane , blockhouse bay only 50% sold - with a $3.8M Half moon bay house and a $3.3M Greenlane property both passing in. These a couple of months ago were prime realestate especially for expats but the new brightline rules might be putting off some expats.
How can they be selling all these houses when we are told there is 'no supply' by the specuvestors?
Something doesn't add up!
How can they be selling all these houses when we are told there is 'no supply' by the specuvestors?
Something doesn't add up!
Anne Gibson in the NZ Herald - Average AKL price increased $93,000 in March 2021
Barfoot & Thompson said today average prices rose from $1.07 million in February to $1.1m last month.
https://www.nzherald.co.nz/business/auckland-house-prices-agencys-sales…
I just looked, she doesn't say that - or has her article been corrected?
No she doesn't say prices increased by $93,000
What she does say prices increased from $1.07 million to $1.1 million in March
Expressed in millions it sounds less frightening
If you do the maths it is still $93,000
Except that if you do the maths correctly, the difference between 1.07 Mill and 1.1 Mill is $30k, as in $30'000 not $93'000
You are correct - I stand corrected
WoW.
If have been bought by so called investors despite knowing the changes in Tax on investment property, how could they cry foul.
In real world, most investors are buy for capial gain. Full stop
Agree are buying as leveraging theexisting house by using equity and possible because of low interest rate and more than low interest rate, it is because it is feasible by opting for interest only loan.
Have read many comments on interestonly loan and do not see any reason, whyit should not be stoppedor controlledspeciallywhen our PM on public platform along with FM accepts and says that wants to target speculative demand.
All other measures introduced will help but to stop future speculative buying, should control the source used to fund it (as cannot increase interest rate but can defintely target speculators).
Is this silence by PM, FM and reserve bank governor on purpose beingtoo smart or are they seriously stupid and ignorant and in both scenario, they must go.
In real world, most investors are buy for capial gain. Full stop
Highlighting that the biggest problems we face are of moral character and rampant tax evasion.
"Most returns for investors come from capital gains anyway.”
Better make sure Andrew King has a word to this writer, quick smart. The last thing that should be said out loud, is what this person has just said.
https://www.stuff.co.nz/life-style/homed/real-estate/300270132/property…
Q. Are property portfolios ethical?
I think you're on the wrong website, Interest's maxim is "Helping you make financial decisions"
Financial decisions involve ethics. You can argue that this isn't true, but that is the argument only an unethical person would take.
Here's a good read if you feel like broadening your horizons:
https://www.amazon.com/Finance-Good-Society-Robert-Shiller/dp/0691154880
Absolutely.
They just operate with the incentives and rules they are given.
Ideally, any property portfolio should be entirely self-funded without debt (which if you read the article, appears to be what some portfolio holders are now aiming at).
Speculative Debt to secure the right to acquire Social Necessities is only possible with the complicity of the regulatory bodies of a country i.e. The Government of the day.
If any unethical behaviour can be found at all, it lies with them and their predecessors.
Let's hope this Government recognises that and the recent changes are just a few of many to come.
(PS: You only have to read the article to see what a massive problem we have created for ourselves over decades of flawed Government policy)
Operating within the rules they are given means that capital gains taxes are due when investing for capital gains. See: Granny Herald
???
The initial LVR removal will take effect for around 24 months, as the progressive loan approval which seek shelter to buy. Any new measures, considered too be late at this stage.. the unsustainable rocket booster button has been pressed hard on Q1 2020. So now it's a matter of observing the results, deploying couple small parachutes behind only slightly wobble the vessel, watch the spin dynamic in action Before the...
This government has been reactive rather than proactive and even then its all way to late. House prices are sticky, even worse than Petrol, fast to go up and slow to go down. They will claim success but seriously the prices couldn't have keep going up at the rates of the last couple of months even if they sat back and did nothing at all and Winter is on it way. Even low percentage gains of 3-4% PA are now huge in actual dollar terms. Pretty sure Labour would openly state that those sorts of "small" gains are "Expected".
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